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Recent Trends in Small Business Lending and the Community Reinvestment Act Accessible Data

Figure 1: Small business loan originations

Series: All lending and lending to businesses with revenues less than $1 million

Horizon: 2006 through 2016

Figure 1 plots the trend from 2006 to 2016 in an index in dollar volume of small business loan originations from Community Reinvestment Act data for all small commercial and industrial (C&I) and nonfarm nonresidential property (NNP) loans and for small C&I and NNP loans to businesses with revenues of less than $1 million. The index for each series is defined so that its value in 2010 is equal to 100.

After a slight increase from approximately 173 in 2006 to approximately 187 in 2007, the index for all small C&I and NNP loans fell to approximately 164 in 2008, to 110 in 2009, and to 100 in 2010. It increased to approximately 110 in 2011 and remained approximately unchanged through 2014 before increasing to approximately 125 in 2015 and 131 in 2016.

The index for small C&I and NNP loans to businesses with revenues of less than $1 million follows a broadly similar trend. From 2006 to 2007, it increased slightly from approximately 208 to approximately 212. It then declined to approximately 165 in 2008, to approximately 110 in 2009, and to 100 in 2010. It then increased to 112 in 2011 and remained approximately unchanged through 2014 before increasing to approximately 125 in 2015 and 2016.

Figure 2, panel A plots the trend for 2006 through 2016 in an index in dollar volume of small business loan originations from Community Reinvestment Act data for all small commercial and industrial and nonfarm nonresidential property loans for four groups—low- and moderate-income (LMI) neighborhoods inside assessment area (AA), LMI neighborhoods outside AA, non-LMI neighborhoods inside AA, and non-LMI neighborhoods outside AA. The index for each series is defined so that its value in 2010 is equal to 100.

The index for loan originations in LMI neighborhoods inside AA increased from approximately 152 to 155 between 2006 and 2007. It then declined to 140 in 2008, 108 in 2009, and 100 in 2010. It subsequently increased to approximately 110 in 2011 and 127 in 2012. In 2013, the index increased to 133 and remained close to 135 through 2016.

The index for loan originations in non-LMI neighborhoods inside AA follows a broadly similar trend. It increased from approximately 150 to 155 between 2006 and 2007. It then declined to 142 in 2008, 108 in 2009, and 100 in 2010. It subsequently increased to approximately 110 in 2011 before falling to 105 in 2012. Then, it reached 110 in 2013 and 2014 before rising to approximately 114 in 2015 and 2016.

The index for loan originations in LMI neighborhoods outside AA increased from 265 to 305 from 2006 to 2007. It then fell to 240 in 2008, to 115 in 2009, and 100 in 2010. It then increased to approximately 120 in 2011 and 155 in 2012 before declining slightly to 150 in 2013. It then climbed to 170 in 2014, 188 in 2015, and 220 in 2016.

The index for loan originations in non-LMI neighborhoods outside AA increased from 263 to 310 from 2006 to 2007. It then fell to 250 in 2008, to 115 in 2009, and 100 in 2010. It then increased to approximately 120 in 2011 and 124 in 2012 before declining slightly to 120 in 2013. It then climbed to 135 in 2014, 148 in 2015, and 170 in 2016.

Figure 2, panel B plots the trend for 2006 through 2016 in an index in dollar volume of small business loan originations from Community Reinvestment Act data for small commercial and industrial and nonfarm nonresidential property loans to businesses with revenues of less than $1 million for four groups—low- and moderate-income (LMI) neighborhoods inside assessment area (AA), LMI neighborhoods outside AA, non-LMI neighborhoods inside AA, and non-LMI neighborhoods outside AA. The index for each series is defined so that its value in 2010 is equal to 100.

The index for loan originations in LMI neighborhoods inside AA decreased from approximately 185 in 2006 to 180 in 2007. It then decreased to 152 in 2008, 109 in 2009, and 100 in 2010. It increased to approximately 110 in 2011 and 130 in 2012 and 2013. In 2014, it decreased to 128 before increasing to approximately 135 in 2015 and 2016.

The index for loan originations in non-LMI neighborhoods inside AA was approximately 168 in 2006 and 2007. It then decreased to 150 in 2008, 108 in 2009, and 100 in 2010. It increased to approximately 110 in 2011 before decreasing to 102 in 2012. It was approximately 104 in 2013 and 100 in 2014. In 2015 and 2016, it was approximately 107.

The index for loan originations in LMI neighborhoods outside AA increased from 400 to 420 from 2006 to 2007. It then declined to 250 in 2008, 127 in 2009, and 100 in 2010. It increased to 137 in 2011 and 178 in 2012. It was 176 in 2013 before increasing to 190 in 2014, 218 in 2015, and 230 in 2016.

The index for loan originations in non-LMI neighborhoods outside AA increased from 375 to 400 from 2006 to 2007. It then declined to 23 in 2008, 124 in 2009, and 100 in 2010. It increased to 135 in 2011 and 143 in 2012. It was 142 in 2013 before increasing to 150 in 2014, 175 in 2015, and 185 in 2016.

Figure 3A: All small business loan originations by minority neighborhood population share

Figure 3, panel A plots the trend for 2006 through 2016 in an index in dollar volume of small business loan originations from Community Reinvestment Act data for all small commercial and industrial and nonfarm nonresidential property loans for two distinct groups—neighborhoods with a low minority population share and neighborhoods with a high minority population share. The index for each series is defined so that its value in 2010 is equal to 100.

The index for loan originations to neighborhoods with a low minority population share increased from 168 in 2006 to 183 in 2007. It then decreased to 163 in 2008, 109 in 2009, and 100 in 2010. It increased to 110 in 2011 before decreasing to 96 in 2012. It then increased to 97 in 2013, 98 in 2014, 104 in 2015, and 108 in 2016.

The index for loan originations to neighborhoods with a high minority population share increased from 183 in 2006 to 198 in 2007. It then decreased to 165 in 2008, 111 in 2009, and 100 in 2010. It increased to 112 in 2011 and 153 in 2012. It then increased to 160 in 2013, 165 in 2014, 175 in 2015, and 185 in 2016.

Figure 3B: Loan originations to businesses with revenues less than $1 million by minority neighborhood population share

Figure 3, panel B plots the trend for 2006 through 2016 in an index in dollar volume of small business loan originations from Community Reinvestment Act data for small commercial and industrial and nonfarm nonresidential property loans to businesses with revenues of less than $1 million for two distinct groups—neighborhoods with a low minority population share and neighborhoods with a high minority population share. The index for each series is defined so that its value in 2010 is equal to 100.

The index for loan originations to neighborhoods with a low minority population increased from 197 in 2006 to 202 in 2007. It then decreased to 163 in 2008, 110 in 2009, and 100 in 2010. It increased to 113 in 2011 before decreasing to 97 in 2012 and 2013. It then decreased to 93 in 2014 before increasing to 104 in 2015 and 2016.

The index for loan originations to neighborhoods with a high minority population share increased from 236 in 2006 to 240 in 2007. It then decreased to 172 in 2008, 113 in 2009, and 100 in 2010. It increased to 117 in 2011 and 158 in 2012. It then increased to 165 in 2013 and 2014 and then to 184 in 2015 and 2016.